Transport for London (TfL) fixed conditions on the sale of Metronet that could not be met by the private sector to ensure that the only option for the troubled company was to return it to the public sector, The Times has learnt.

The Mayor of London’s transport body removed a government commitment to underwrite 95 per cent of Metronet’s borrowings - without this guarantee no private sector company would consider trying to buy the company out of administration.

Possible buyers, thought to include Bechtel, Ferrovial, Carillion, Serco and rival London Underground contractor Tube Lines, were approached by NM Rothschild to gauge their level of interest.

However, when it became clear that the letter of comfort had been withdrawn, the prospects of a sale evaporated. TfL yesterday confirmed it had set buyer’s conditions for the sale of Metronet, but would not be drawn on what those conditions involved because the sale of Metronet is weeks from completion.

“While the administrator has said that he is no longer proactively marketing the company, technically until the point of sale he is under an obligation to consider any interest in the company,” a TfL spokesman said.

Early in the sale process, Tube Lines, the contractor responsible for upgrading the Jubilee, Northern and Piccadilly Lines, said it was interested in bidding for Metronet.

However, Terry Morgan, chief executive, said the opportunity never arose. “No one has seen the buyer guidelines. We wanted to see it, but we were told it wasn’t available,” he said. Lord Oakeshott of Seagrove Bay, the Liberal Democrat Treasury spokesman, criticised the sale: “After the fiasco of the original contracts the last thing we need is a secret, hole-in-the-corner deal. The Government must be totally open about the Transport for London takeover of Metronet.”

He said that he would table questions in the House of Lords in an attempt to expose the truth.

TfL now looks certain to take over Metronet Rail early in the new year as it is the only formal offer so far for Metronet, which entered administration in July.

Metronet is expected to exit administration early in the new year. However, it emerged earlier this week that even when TfL succeeds in taking Metronet back into the public sector, it will still have to put work out to private sector companies.

Times Recommends

• Food prices rise 8.3% on soaring fish and meat
• Car sales crash as economy hits skids
• House prices fall but Bank leaves rates on hold